That's Down From 54% Odds a Week Ago, Before the Soft July Jobs Report

Markets currently see 76% odds of a rate hike by the end of 2026, with 31% odds of 50 basis points in total rate hikes. The Fed typically pays closer attention to the PCE price index than the CPI, because it's a broader measure of inflation and adjusts for consumer substitution. The core PCE price index showed 3.3% inflation in the year through June. The CPI provides about 70% of the inputs for the core PCE price index, with the rest mainly derived from the producer price index, which will be released Thursday morning at 8:30 a.m. and could also influence the Fed's thinking.